This is the Final Public Hearing on the adoption of proposed amendments to Rules 69O-149.037, .038, “Calculation of Premium Rates” and “Employee Health Care Access Act Statement Reporting Requirement”, Florida Administrative Code, published on ...

DATE AND TIME: May 31, 2006, 9:00 a.m., during a regular meeting of the Financial Services Commission

PLACE: Cabinet Meeting Room, Lower Level, The Capitol, Tallahassee, Florida

SUBJECT MATTER TO BE CONSIDERED: This is the Final Public Hearing on the adoption of proposed amendments to Rules 69O-149.037, .038, “Calculation of Premium Rates” and “Employee Health Care Access Act Statement Reporting Requirement”, Florida Administrative Code, published on January 20, 2006 in Vol. 32, No. 03, of the Florida Administrative Weekly. A Notice of Change was published on March 3, 2006 in Vol. 32, No. 09., and a Second Notice of Change was published on April 14, 2006, in Vol. 32, No. 15, of the Weekly.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this program, please advise the contact person at least 5 calendar days before the program by contacting John Rosbury at E-mail [e-mail].

THE FULL TEXT OF THE PROPOSED RULE IS:

69O-149.037 Calculation of Premium Rates.

(1) – (3) No change.

(4) Rate filing requirements –

(a) Modified Community Rating. Premium schedules for benefit plans offered to small employer groups shall be based solely on the following categories and factors applicable to eligible of the employees, without regard to the nature of the employer group.

1.(a) Age Factors Categories. Employee age shall be determined as of the date of issue and each subsequent renewal date thereafter as defined in the policy and certificate. If not explicitly defined in the contract, age shall be the attained age as of the date of issue or renewal of the certificate.

a. Age Categories Effective Prior to October 1, 2006.

(I) < 30 years of age

(II) 30-39 years of age

(III) 40-49 years of age

(IV) 50-54 years of age

(V) 55-59 years of age

(VI) 60-64 years of age

(VII) 65 & above years of age – Medicare is Primary

(VIII) 65 & above years of age – Health Plan is Primary

b. Age Categories Effective On or After October 1, 2006.

(I) < 24 years of age

(II) 25-29 years of age

(III) 30-34 years of age

(IV) 35-39 years of age

(V) 40-44 years of age

(VI) 45-49 years of age

(VII) 50-54 years of age

(VIII) 55-59 years of age

(IX) 60-64 years of age

(X) 65 & above years of age – Medicare is Primary

(XI) 65 & above years of age – Health Plan is Primary

c. The rate for the age 65 & above – Medicare is Primary category shall be applicable when both employee and spouse are enrolled in Medicare. If one is enrolled and one is not, regardless of which spouse is the employee, the rate charged shall be adjusted to reflect the reduction of exposure due to the fact that one spouse is enrolled in Medicare. The rate shall be determined assuming that one individual is enrolled in Medicare. The rate for the individual enrolled in Medicare will be isolated, multiplied by the Medicare is Primary to the Health Plan is Primary ratio, and then added back to the portion of the rate that is not Medicare primary. Samples of illustrative calculations are as follows and other combinations should be calculated in a similar manner:

(I) For employee + spouse coverage where Medicare is the primary coverage for the spouse – The difference between the employee + spouse rate where the Health plan is primary and the employee only rate where the Health Plan is Primary shall be determined. This value shall reflect the implied spouse rate. This implied spouse rate shall be multiplied by the ratio of the Medicare is Primary rate divided by the Health Plan is Primary rate. This resulting rate shall be added to the employee only rate.

(II) For family coverage – The difference between the family rate and the employee + dependent rate shall be determined. This difference shall reflect the implied spouse rate. This implied spouse rate shall be multiplied by the ratio of the Medicare is Primary rate divided by the Health Plan is Primary rate. This resulting rate shall be added to the employee + dependent only rate.

1. < 30

2. 30-39

3. 40-49

4. 50-54

5. 55-59

6. 60-64

7. 65 & above – Medicare is Primary

8. 65 & above – Health Plan is Primary

2.(b)1. Gender/Family Composition Factors. Rating Categories

a. Gender/Family Composition Categories.

(I)a. Employee – Male

(II)b. Employee – Female

(III)c. Employee – Male – Dependent Children

(IV)d. Employee – Female – Dependent Children

(V)e. Employee – Spouse

(VI)f. Employee – Spouse – Dependent Children

b2. For both the employee with spouse plus dependent children category and the employee with dependent children category, companies may include uUp to three 3 optional dependent children categories. are permitted: 1, 2 and 3 or more dependent children for companies for both the employee with family and the employee with dependent children categories.

c3. At the option of the company, dependent only categories.

4. The rate required by subparagraph (4)(a)7. above shall be applicable when both employee and spouse are enrolled in Medicare. If one is enrolled and one is not, regardless of which spouse is the employee, the rate charged shall be adjusted to reflect the reduction of exposure due to the fact that one spouse is enrolled in Medicare. The rate shall be determined assuming that one individual is enrolled in Medicare. The rate for the individual enrolled in Medicare will be isolated, multiplied by the Medicare primary to Medicare secondary ratio, and then added back to the portion of the rate that is not Medicare primary. A sample illustrative calculation follows; other combinations should be calculated in a similar manner:

a. For employee + spouse coverage where the spouse is Medicare primary – The difference between the employee + spouse Medicare secondary rate and the employee only Medicare secondary rate shall be determined. This shall reflect the implied spouse rate. This implied spouse rate shall be multiplied by the ratio of the Medicare primary rate divided by the Health plan primary rate. This resulting rate shall be added to the employee only rate.

b. For family coverage – The difference between the family rate and the employee + dependent rate shall be determined. This shall reflect the implied spouse rate. This implied spouse rate shall be multiplied by the ratio of the Medicare primary rate divided by the Health plan primary rate. This resulting rate shall be added to the employee + dependent only rate.

3.(c) Area Factors by County.

4.(d) Tobacco Usage Factor (>1, base rates are for non-tobacco user).

5.(e) Effective Ddate and Trend Adjustment Factor. The premium schedule may be adjusted based on a medical trend table, approved pursuant to Part I of this rule chapter, reflecting the period of time from the date the rate schedule is effective to the anniversary date of the new or renewing group for medical trend adjustment.

(b) CARES. Small group standard and basic product rates must be filed on a 2-50 life basis using the Rate Collection Systems (CARES), Form OIR-B2-CARES (Rev. 9/19/05), which is hereby adopted and incorporated by reference. These forms are available at: https://iportal.fldfs.com/ cares/Product/Product.asp.

(5) through (7) No change.

(8) Calculation of COBRA Rates. The premium paid for continuation of coverage may not exceed 115 percent of the group rate for groups that consist of fewer than 20 employees as permitted by Section 627.6692(5)(f), F.S., and 102 percent for groups with 20 or more employees as provided by Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1162(2005). The additional rate indicated above, i.e., 15 percent and 2 percent shall be hereinafter referred to as the applicable load.

(a) Qualified beneficiaries, as defined in Section 627.6692(4)(f), F.S., electing continuation of coverage shall be charged the group rate applicable to the qualified beneficiary on the day before the qualifying event, as increased by the applicable load. Whenever the small employer group’s rates change, generally on the group’s anniversary, the rate subsequently charged to the qualified beneficiary for the continuation of coverage will be based on the small employer group’s rate which the qualified beneficiary would have been charged if the qualified beneficiary had remained within the group. If the qualified beneficiary electing continuation of coverage is a spouse or dependent of the covered employee, and the covered employee remains in the group, the rate charged to the covered employee shall be adjusted to reflect the reduction of risk exposure to the company, e.g., the group’s rate applicable after the demographic change. The rate charged for the spouse or dependent shall be isolated from the group’s rate and multiplied by a factor, not to exceed one plus the applicable load, to determine the COBRA rate. Samples of illustrative calculations are as follows and other combinations should be calculated in a similar manner:

1. For employee + dependent coverage when the dependent is electing continuation of coverage, the difference between the employee + dependent rate and the employee only rate shall be determined. This difference shall then be divided by the average number of dependents used by the carrier in developing the rate schedule. This value shall reflect the implied single dependent rate. To determine the COBRA rate, the implied dependent rate shall be multiplied by a factor that does not exceed one plus the applicable load. The employee shall be charged the group employee only rate.

2. For family coverage where the dependent is electing continuation of coverage, the difference between the family rate and the employee + spouse only rate shall be determined. This difference shall then be divided by the average number of dependents used by the carrier in developing the rate schedule. This value shall reflect the implied single dependent rate. To determine the COBRA rate, the implied single dependent rate shall be multiplied by a factor that does not exceed one plus the applicable load. The employee shall be charged the group rate applicable to the remaining covered lives in the group, e.g., if the remaining covered lives are the employee, spouse and another dependent, then the family rate would be charged. If the remaining covered lives are only the employee and spouse, then the employee + spouse rate would be charged.

3. If a small employer carrier uses optional dependent children categories as provided by subparagraph (4)(a)2.b. above, the dependent rate shall be directly determined by calculating the difference between the two family tier rates, e.g., a rate with two dependents minus the rate with one dependent shall determine the single dependent rate.

(b) COBRA rates do not need to be filed unless the small employer carrier seeks to utilize a different rating methodology other than the one described above.

 

Specific Authority 624.308(1), 624.424(1)(c), 627.6699(17)(16) FS. Law Implemented 627.410, 627.6692, 627.6699(3), (6), (12)(e), (13), (13)(i) FS. History–New 3-1-93, Amended 11-7-93, 5-11-94, 4-23-95, 8-4-02, 6-19-03, Formerly 4-149.037, Amended________.

 

69O-149.038 Employee Health Care Access Act Statement Reporting Requirement.

(1) through (2) No change.

(3)(a)1. All small employer carriers utilizing rating adjustments pursuant to subsection 69O-149.037(6), F.A.C., shall make semiannual reports that reflect their experience from January 1 through June 30 and from July 1 through December 31 of each year. The reports shall be filed with the Office, pursuant to paragraph 69O-149.044(2)(b), F.A.C., within 45 days following the last day of the reporting period using Form OIR-B2-1575, “Small Eemployer Group Underwriting Experience Report Form” adopted in Rule 69O-149.044, F.A.C.

2. The experience of any group category that is not subject to underwriting, pursuant to subsection 69O-149.037(6), F.A.C., such as 1-life groups, shall not be included in the report.

(b) through (d) No change.

 

Specific Authority 627.6699(5)(i)4., (6), (17)(16), 627.9175 FS. Law Implemented 624.424(6), 627.6699, 627.6699(5)(i)(6)(b)5., (8)(b), 627.9175 FS. History–New 3-1-93, Amended 11-7-93, 8-4-02, 6-19-03, Formerly 4-149.038, Amended 5-18-04, 3-24-05, 9-15-05,________.